Assume that a firm has prepared the following cost estimates for the manufacture of a sub assembly component based on an annual production of 8,000 units.

	Per Unit	Total
Direct materials	$5	$40,000
Direct labor	$4	$32,000
Variable factory overhead applied	$4	$32,000
Fixed factory over head applied (150% of direct labor cost)	$6	$48,000
Total Cost	$19	$152,000

The supplier has offered to provide the subassembly at a price of $16 each. Two-thirds of fixed factory overhead, which represents executive salaries, rent, depreciation, and taxes, continue regardless of the decision. Should the company buy or make the product?